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N.D. Industrial Commission approves steps to reduce flaring

A field of canola blooms in the foreground of an oil well near New Town, N.D. The horse head pumper is to the left, with oil and water storage tanks in the middle and escaping natural gas flaring to the right. Eric Hylden/Grand Forks Herald

Commission members voted to begin requiring gas capture plans for all drilling permit applications after June 1. Operators also will have to provide an affidavit stating that they have provided the plan to all natural gas gathering companies in the area.

Helms said companies are more likely to invest in gas gathering projects if they know the operator’s plans a year or two in advance.

“We need to force that communication to happen,” he said.

Gov. Jack Dalrymple said he was “very encouraged” that Helms’ recommendations were built around the recent work of the North Dakota Petroleum Council’s task force made up of industry representatives, calling partnership with private industry “critical.”

Still, Dalrymple said the commission is “going to have to really analyze” the gas capture plans and make sure each is viable.

“It won’t do any good if we just rubber stamp every gas plan that comes forward,” he said.

Helms said the steps should help the state reduce the percentage of natural gas being flared, or burned off, at oil wells to 5 percent by 2020. The task force said last month its proposals could boost capture to 85 percent in two years, 90 percent in six years and ultimately 95 percent.

North Dakota flared 36 percent of its natural gas produced in December, though that percentage is expected to drop when a processing plant near Tioga that’s been offline since Thanksgiving starts up again soon. The historical low was 28 percent last October, according to Helms’ office.

Under the steps approved Monday, the Department of Mineral Resources will meet with gas gathering companies twice a year – once before and once after the construction season – to gauge the effects of gas capture plans.

Helms said a hearing also will be set to revise the rules for curtailing oil production in the Bakken and Three Forks formations if flaring guidelines aren’t met – rules that Helms said are outdated and not being enforced as companies are being granted exemptions.

“The real tool that you have is curtailing production,” Helms said. “It is a really powerful tool though, and we want to wield it with care. It can be an incentive, but it also can be an incredible disincentive.”

The Department of Mineral Resources also will develop a web-based pipeline incident report form for surface owners, and the Pipeline Authority will track flaring and report whether goals are being met, under the steps approved Monday.

Helms said it should be possible to have all of the steps implemented by the end of September.

Don Morrison, executive director of the Dakota Resource Council, said it appeared that Monday’s commission action “was a recognition that how the state has been implementing these laws has not worked.” He said the state has turned its back on landowners who have been subjected to heavy-handed tactics by the oil industry in obtaining easements, as well as loss of land value from pipelines crossing their land.

“It really is up to the industry to regain that trust,” he said.

Wayde Schafer, conservation organizer for the Dacotah Chapter of the Sierra Club, said he hopes to see better enforcement of flaring rules.

“If the drilling is causing waste of a natural resource, maybe it needs to be disincentivized,” he said.